7 Reasons to Buy Suncor (TSX:SU) Stock and Never Sell

The qualities of Suncor Energy Inc. (TSX:SU)(NYSE:SU) as a high-grade investment can be summed up with just seven reasons. When you buy the stock, you won’t be selling it.

| More on:

The Toronto Stock Exchange has many good investment choices for seasoned investors as well as beginners. But if you’re looking for long-term holdings that you don’t have to sell, Suncor (TSX:SU)(NYSE:SU) is one of the select few.

There are compelling reasons to invest in Suncor and be eternally on the winning side. Apart from being a prominent oil and gas integrated company in North America, the stock has an excellent record of delivering substantial gains to loyal shareholders.

The following are seven reasons why Suncor is the stock you can buy and not think about selling.

Industry leader

Suncor is a well-established integrated energy company that has been developing petroleum resource basins in oil sands. It also explores, acquires, develops, produces, and markets crude oil and natural gas in Canada and internationally.

It does the refining and transporting of crude oil as well as the marketing of petroleum and petrochemical products in the entire country. After operating for 66 years, Suncor is now an industry leader.

North America’s source of energy

Imagine North America without Suncor. This $62 billion company provide secure sources of energy to the region, as owner and operator of four oil refineries, an ethanol plant, wind farms, and more than 1,500 retail and wholesale outlets.

Growing energy portfolio

Suncor is not sitting on its laurels and decades of success. The company keeps growing its energy portfolio with an increasing concentration on renewable energy recently. With the addition of more strategic assets, you can expect Suncor to grow 9.5% annually over the next five years.

Hedge against oil price volatility

Some investors are wary about the Canadian energy sector because of the unpredictability and volatility of oil prices. Suncor is a cut above the rest because its integrated business structure serves as a hedge against lower oil prices.

The lower input costs in its refining operations is an advantage when the market is weak. Despite the weakness, the company realizes healthy margins after the sale of finished products.

Dividend all-star

Suncor is a dividend all-star. The company has been paying dividends for 15 consecutive years. Even during oil routs, the company generates income because it has a long pipeline of significant development projects.

If a company can maintain a dividend streak that long, you know you’ll be receiving an endless stream of passive or active income.

Wealth builder

With a dividend of nearly 4%, Suncor is the ideal stock to place in your TFSA or RRSP. Also, you won’t agonize over your investment going south should a recession come. The yield is standing on solid ground. The company’s balance sheet is strong, with not much debt on the liabilities side.

Buffett’s top energy stock

Lastly, legendary investor Warren Buffett is the indirect endorser of Suncor. His conglomerate sold all its Suncor shares in 2016. But in less than two years, Buffett saw the blunder and repurchased shares of Suncor in 2018. His action confirms that Suncor is a value stock with strong upside potential.

I can cite 50 other justifications, but I believe the seven reasons are more than sufficient to defend my position on Suncor. As an investor, you’ve got it made with this energy stock.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned.

More on Dividend Stocks

profit rises over time
Dividend Stocks

Buy 2,990 Shares of This Stock for $165.25/Month in Passive Income

A high-yield dividend stock can transform your investment into monthly passive income streams.

Read more »

close-up photo of investor Warren Buffett
Dividend Stocks

3 Warren Buffett Stocks to Buy Hand Over Fist in November

Warren Buffett has been buying Occidental Petroleum (NYSE:OXY) hand over fist. He previously owned the similar Canadian oil giant Suncor…

Read more »

dividend growth for passive income
Dividend Stocks

Is Intact Financial Stock a Buy for its 1.8% Dividend Yield?

Intact Financial's dividend is not that attractive, but its strong history of execution and dividend growth are compelling factors for…

Read more »

Hourglass and stock price chart
Dividend Stocks

Where Will Brookfield Stock Be in 5 Years?

Based on its recent successes, Brookfield Corp (TSX:BN) looks poised to be more valuable in five years' time than today.

Read more »

hand stacks coins
Dividend Stocks

The Smartest Dividend Stocks to Buy With $400 Right Now

The market is full of dividend stocks to buy. Here's a look at two options that cater to both growth…

Read more »

ways to boost income
Dividend Stocks

This Top TSX Dividend Stock Down 10.78% Is Ready for a Rebound

The rebound of an underperforming but top TSX dividend stock is coming due to a significant product diversification.

Read more »

Canadian Dollars bills
Dividend Stocks

3 Dividend Stocks to Supercharge Your Passive Income

These companies are known for their consistent payout histories and high yields can supercharge your passive-income portfolio.

Read more »

space ship model takes off
Top TSX Stocks

My 5 Favourite Stocks to Buy Right Now

There are plenty of great stocks on the market. Here's a look at my favourite stocks to own for growth…

Read more »